He also warns that Britain’s upcoming vote on whether to stay in the European Union could hurt sterling:

“As we move into 2016 it will be the ability of the Chinese authorities to stabilise economic growth that will shape the global outlook. China at the moment is feeling the blowback of years of investment driven growth with industries chock full of unproductive factories, a housing sector with a significant stock overhang and ensuing high debt levels in local government and corporate balance sheets.”

“Risks of another global downturn will continue to favour the US dollar as the true currency of safe haven flows. There are reasons to be optimistic in 2016 around global growth but risks from China, Eurozone and Latin America balance will still exist.”

“The build up to a UK referendum on EU membership will be a major source of instability on the British pound and the prospect of a possible ‘Brexit’ makes pricing the risk of the referendum a thankless task at the moment.”

2.37pm GMT

As predicted, shares on Wall Street are dropping in early trading.

The S&P 500 index has lost 0.3%, putting it back in the red for the year.

And the Dow Jones industrial average is down 100 points, or 0.6%. That means the Dow is 2% down this year.

February 24 saw the London market break a record that had stood for more than 15 years as the FTSE 100 hit a new all-time high, boosted by investor optimism about the financial crisis in Greece.

Britain’s benchmark index of leading shares closed at 6958.89, which meant the FTSE 100 finally surpassed its previous intraday peak of 6950.6 set on December 30 1999, just before the dotcom bubble burst.

The index reached a series of all-time highs before hitting its peak of 7104 on April 27, boasting a total market value of 2 trillion.

But all this was to change in the summer as China’s economic woes began to unfold.

Global markets were spooked as China posted slowing gross domestic product figures of around 7% after almost a decade of double-digit growth.

1.50pm GMT

Joshua Mahoney of IG suggests that the London stock market will be driven by speculation over UK interest rate rises next year:

2015 has seen the FTSE moving in an inverse manner with inflation, with falling inflation in early 2015 treated with glee by investors, yet as disinflation fears were allayed in H2, we have seen the FTSE pull back in anticipation of a more hawkish BoE stance.

Given that disinflation fears have been driven largely by the fall in oil prices, there is reason to believe that 2016 will also see sentiment largely driven by the movement of oil prices, their impact upon inflation expectations and the subsequent monetary policy stance from the BoE.

1.39pm GMT

Analysts at RBS point out that the FTSE has now recorded two annual declines in a row:

BP is evacuating a North Sea platform right now

Oil giant BP is scrambling to evacuate staff from a platform in the North Sea, because a barge is drifting in the area.

Workers at its plant at the Valhall operation are heading for land, after the unmanned vessel broke from its moorings in rough seas.

A spokesman told Reuters that:

“The barge has changed direction and BP has decided to shut production [at Valhall] and there will be a total de-manning of the platform. There are 71 people left on the platform and they are being evacuated as we speak.”

Puerto Rico’s national debt now totals $73bn, which the government says is unsustainable. But as it cannot legally declare bankruptcy, it is forced to cut vital services, plead for relief from creditors, and default on payments in an ad hoc manner.

More rouble trouble ahead?

A giant Christmas bauble for the New Year and Christmas celebrations at the Manezhnaya square in downtown Moscow, Russia.Photograph: Ivan Sekretarev/AP

The slump in the rouble will hurt Russian families by pushing up the cost of imported goods, and make an overseas trip even pricier.

Our Moscow correspondent Shaun Walker explains how the currency could fall further in 2016:

Some analysts say the rouble is still overvalued, and the current oil price should theoretically push the rouble down further. This is necessary to balance the budget: the fewer dollars Russia receives for the oil it sells, the higher the exchange rate needs to be for the budget to receive the requisite amount of roubles. For the budget to balance at 65 roubles, not far off the current rate, the price of oil should be $70, a recent Bank of America Merrill Lynch report found.

For ordinary Russians, it could be a tough year ahead. Those who were used to travelling abroad have already had to scale back as the rouble made the cost of visiting foreign cities prohibitive; and rising food prices have made it harder to balance the books for many families.

The 2016 budget, fixed in October, requires oil to be at $50 in order to run a 3% deficit within “acceptable” rouble rate limits, meaning if the price does not rise soon, cuts will need to be made or reserves spent. The war in Syria is an extra cost, and the announced increases in military spending are not likely to be reversed.

An underwhelming start to trading in London has send the FTSE 100 down by 17 points, or 0.3%, to 6257.

FTSE 100 top risers and fallers todayPhotograph: Thomson Reuters

Augustin Eden of Accendo Markets says:

A continued slide in the oil price and a US Dollar that’s not going down without a fight are dominating sentiment as people begin to attempt their 2016 forecasts, seeing headwinds for long term earnings.

9.24am GMT

Sports Direct’s New Year pay pledge is worth around 15p per hour to around 15,000 workers at its stores (many on zero hours contracts) and some 4,000 agency staff at its depot.

Retail analyst Nick Bubb says it could improve the company’s public image, at a price….

Mike Ashley’s New Year resolution to be a better employer will go some way to improve Sports Direct’s battered PR image, but it will knock c£10m off the profit base…

That’s waaaaay below the break-even point for oil producers (Kuwait needs around $52 per barrel while Saudi needs $96, for example).

The Financial Times’s energy editor, Ed Crooks, has stuck his neck out and predicted oil will recover in 2016:

Brent crude below $50 per barrel is too low for the industry to make the investments needed to meet growing global demand. Providing the world economy does not skid into recession, this looks like being the year that the oil price heads back to more sustainable levels.

Other FT predictions for 2016 include Belgium winning the Euro 2016 football championship, and Angela Merkel being ousted, Thatcher-style by her party….

“It’s hard to expect stronger oil right now. It should rise to $45-$50 per barrel, maybe, by the end of 2016. Reduction of investments should eventually make impact, the question is what the lag will be.”

That’s via the Wall Street Journal, who point out that Russia’s manufacturing sector is contracting again (according to data released yesterday). More here:

Asian markets have already ended the year on a quiet note, with China’s main indices down almost 1% and Australia losing 0.5%.

IG analyst Angus Nicholson says there are concerns that 2016 could start badly:

Concerns about traders coming back from holidays in January and aggressively selling off the market may have driven a number of investors to take some of the profits off the table after the good run we have seen over the holiday period.

How appropriate that December’s excess could be followed by a nasty hangover….

I’ll be tracking all the main events though the day, looking back over the last 12 months and ahead to 2016….